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Serbian Businesses Spend 2% of GDP Each Year in Hidden Taxes

April 19 (Bloomberg) -- Businesses in Serbia are paying 730 million euros ($954.6 million) each year in hidden taxes, or 2 percent of economic output they could have spent on investments.

Companies in Serbia are paying 370 various taxes and charges including land and registry fees, mineral and geothermal resource fees, water and pollution charges, which translates into a cost of 570 euros per employee in the private sector, where 1.27 million people worked last year, according to a study conducted by the USAID and Serbia’s Alliance for Local Economic Development.

The survey of 1,000 businesses was conducted between October and February following an increase in complaints by businessmen over “excessive number of non-tax burdens” at a time when the Balkan country is eager to lure new investors, the study said.

Half of the total amount goes to the central government and the rest is collected by local governments, it said. Serbia’s fiscal deficit stood at $1.9 billion at the end of 2011, or 4.8 percent of GDP.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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